- Dow posts biggest jump in 3 weeks, partially recovering from worst selloff in 3 months in volatile trading
- What are major benchmarks doing?
- Which companies are in focus?
- How are other assets trading?
- Stock market news live updates: Stocks jump as GameStop craters, retail rally unwinds
- 4:02 p.m. ET: Dow adds 477 points, or 1.6%, for best session since November as GameStop craters
- 1:23 p.m. ET: GameStop frenzy represents just the latest of a string of ‘chaos-driven challenges to establishment institutions’: GeoQuant CEO
- 12:00 p.m. ET: Stocks extend gains, Dow adds 600 points, or 2%
- 9:30 a.m. ET: Stocks open higher, heading toward back-to-back sessions of gains
- 8:12 a.m. ET: U.S. crude oil prices briefly touch per barrel for the first time in a year
- 7:14 a.m. ET Tuesday: Stock futures extend gains ahead of the opening bell
- 6:11 p.m. ET Monday: Stock futures point higher
Dow posts biggest jump in 3 weeks, partially recovering from worst selloff in 3 months in volatile trading
U.S. stocks finished higher Thursday, partially recovering from the worst one day sell off since October on Wednesday, as investors focused on earnings reports from big technology companies and positive economic data.
Investors also monitored volatile trading in shares of small-cap companies such as Gamestop, which later saw a halt to trading from brokerages, drawing the attention of lawmakers in Washington.
What are major benchmarks doing?
- The Dow Jones Industrial Average DJIA, +0.57% gained 300.19 points, or 1%, to 30,603.36 and posted its largest one day point and percentage gain since Wednesday, January 6, 2021.
- The S&P 500 SPX, +0.58% rose 36.61 points, or 1%, to 3,787.38.
- The Nasdaq Composite Index COMP, +0.43% advanced 66.56 points, or 0.5%, to 13,337.16.
Benchmarks fell sharply on Wednesday, with the Dow dropping 633.87 points, or 2.1%, while the S&P 500 and Nasdaq Composite each dropped 2.6%.
Volumes surged on Wednesday with more than 23 billion shares traded, the highest since May 2019, according to Dow Jones Market Data.
All eleven S&P 500 index sectors rose Thursday, after all fell Wednesday, marking the first time that has occurred since Nov. 13 last year, as investors took heart from corporate earnings reports and data showing a slow economic recovery from the coronavirus pandemic.
“On balance, today’s numbers were in-line or better than expected with the job numbers particularly encouraging given the current state of the economy and lockdowns heading into next week’s monthly employment numbers,” Colin Cieszynski, chief market strategist at SIAWealth, told MarketWatch.
A reading of those seeking initial jobless claims in the week ended Jan. 23, fell by 67,000 to a seasonally adjusted 847,000, marking the lowest level in three weeks, but layoffs were still high early in 2021 as the economy wrestled with a winter surge in the coronavirus.
Separately, a report on U.S. economic growth, or GDP, showed that the economy grew at a modest 4% annual pace in the final three months of 2020.
But others said Thursday’s trading may have had little to do with economic fundamentals.
Long-short hedge funds were also dipping their toes back into the market, after they cut down both their long and short positions this week to limit losses and avoid being caught out by the sharp surge in stocks Gamestop GME, +7.99% and AMC Entertainment AMC, -1.46%, according to Mike Drummey, head of U.S. equity risk trading at Mizuho Americas, in an interview.
“So what inning is this? I think we’re in the later innings. Yesterday might have been max pain, but we’re nearing the end,” said Drummey.
The frenetic trading in small-cap stocks has been part of a battle between an army of individual investors organized on platforms Reddit and short selling hedge funds. Brokerages such as Robinhood later froze trading in Gamestop, raising the hackles of lawmakers who called for investigations into the trading halt.
See: GameStop, AMC close lower as trades restricted following Wednesday’s massive gains
While overshadowed by the GameStop saga, analysts said remarks Wednesday by Federal Reserve Chairman Jerome Powell underlining that the economy remains a long way from recovery and that some sectors already damaged by the coronavirus pandemic were experiencing another round of pain were also a drag on the market.
In other economic reports, sales of newly built homes occurred at a seasonally adjusted annual rate of 842,000 in December, the Census Bureau reported Thursday. That was 1.6% above the downwardly revised pace of 829,000 in November. Analysts polled by MarketWatch had projected new-home sales to occur at a seasonally-adjusted annual rate of 875,000.
Meanwhile, advanced U.S. trade deficit in goods narrowed to $82.5 billion in December versus $85.5 billion in the prior month.
Which companies are in focus?
- Gamestop shares fell 44% and shares of AMC Entertainment fell 57%.
- Apple Inc. AAPL, -0.43% shares closed 3.5% lower after reporting its highest quarterly revenue total yet as the new iPhone 12 powered the company to its first $100-billion quarter in sales though its outlook disappointed.
- Tesla Inc. TSLA, -0.56% shares fell 3.3% after the electric vehicle maker reported its sixth-straight quarter of profit and a sales beat, but fell short of Wall Street expectations and disappointed investors who hoped for a clear-cut sales goal for the year.
- , +0.57% shares slipped 2.6% after the social-media giant delivered better-than-expected fourth-quarter results but warned of “significant uncertainty as we manage through a number of cross currents in 2021.”
- McDonalds Corp. MCD, -0.45% shares was down 0.5% after falling short of Wall Street forecasts on earnings and revenues.
- Shares of Southwest Airlines Co. LUV, +1.42% gained 0.8% after the airline reported its annual loss since 1972 and offered bleak guidance for the first few months of the year as the pandemic continues to weigh on travel activity.
- American Air Lines Group Inc. AAL, +0.37% shares climbed 9.3% after the carrier reported a narrower-than-expected fourth-quarter loss, and revenue and load factor that beat expectations.
How are other assets trading?
- Oil prices traded lower, with the U.S. benchmark CL.1, +4.15% losing 51 cents, or 1%, to settle at $52.34 per barrel on the New York Mercantile Exchange. Gold futures GC00, +0.14% fell $7, or 0.4%, to settle at $1,837.90 an ounce, recording a sixth straight loss.
- The yield on the 10-year Treasury note TMUBMUSD10Y, 1.663% climbed 4.1 basis points to 1.055%. Yields and bond prices move in opposite directions.
- The ICE U.S. Dollar Index DXY, +0.26% a measure of the U.S. currency against a basket of six major rivals, was 0.2% lower.
- The pan-European Stoxx 600 stock index SXXP, +0.90% rose 0.1%, while London’s FTSE 100 UKX, +0.87% slipped 0.6%.
- In Asia, stocks were mixed. The Shanghai Composite SHCOMP, +1.63% fell 1.9%, Hong Kong’s Hang Seng Index HSI, +1.57% shed 2.6%, and Japan’s Nikkei 225 NIK, +1.56% index retreated by 1.5%.
Stock market news live updates: Stocks jump as GameStop craters, retail rally unwinds
The major stock indexes rose Tuesday, while shares of retail traders’ top stock picks including GameStop unwound some recent gains.
[Click here to read what’s moving markets heading into Wednesday, Feb. 3]
The Dow added about 600 points, or 2%, at session highs, while both the Nasdaq and S&P 500 jumped more than 1.5%.
Silver futures (SI=F) fell more than 6%, after derivatives exchange CME Group increased margins on Comex silver futures by nearly 20%, Bloomberg first reported, in a move that would increase the cash needed to trade the contracts. The commodity’s prices soared on Monday to breach $30 per ounce, touching its highest level in eight years as some online traders pivoted to target silver after last week’s surge in heavily shorted stocks.
Many of the stock picks popularized on Reddit’s r/wallstreetbets forum last week extended Monday’s losses, giving back more of last week’s sharp gains. GameStop (GME) sank more than 40% following a 31% slide on Monday, bringing the stock down below $100 per share at session lows from a peak of $483 last week. AMC (AMC), Express (EXPR) and Koss Corporation (KOSS) also added to losses.
Despite the pullback in these names, some strategists noted that the increased retail participation that made headlines over the past couple weeks may remain in markets.
“While there are reasons why retail investor trading has surged suddenly, (zero commission trading, lockdowns/social distancing, stimulus checks, and colder temperatures) … we believe a structural change may be afoot and that retail investors are ly to remain bigger players in the U.S.
equity market going forward,” RBC Capital Markets strategist Lori Calvasina wrote in a note Tuesday.
“The big upward moves in certain small cap stocks are ly temporary in early 2021, but we suspect that retail interest in trading specific names will continue to ebb and flow, just as it has done over the past year.”
“Unless the door closes (i.e.
, through a major regulatory change), we fail to see why retail investor interest in trading specific names will completely go away given how elevated cash on the sidelines is among consumers.
Ultimately, this may be good for active managers by creating more dislocations, even though recent moves have admittedly caused some pain in long-only portfolios in early 2021.”
Others, however, have begun raising concerns over the volatility around a broadening number of stocks, commodities and cryptocurrencies, especially as the ballooning prices appeared detached from traditional measures of asset valuation. Bank of America strategists on Monday drew comparisons between trading today to the dot-com bubble around 2000, which had also been marked by increasing retail participation, rich valuations and euphoria around stocks.
But still others have remained as yet unworried about spillover of the Reddit-fueled trading volatility into the broader stock market.
“So far the good news is un, say, 1999 to 2000, the big heightened speculative activity is not in the big major stocks driving the S&P 500. So maybe that’s one saving grace,” Liz Ann Sonders, chief investment strategist for Charles Schwab, told Yahoo Finance. “There’s no question there’s a lot of micro-bubbles. I’m not sure we’re quite yet there in terms of the broader market.”
Some of the larger stocks in the S&P 500 are poised to report quarterly results on Tuesday, including Amazon (AMZN) and Alphabet (GOOGL) after market close.
4:02 p.m. ET: Dow adds 477 points, or 1.6%, for best session since November as GameStop craters
Here were the main moves in markets as of 4:02 p.m. ET:
S&P 500 (GSPC): +52.37 (+1.39%) to 3,826.23
Dow (DJI): +476.09 (+1.58%) to 30,688.00
Nasdaq (IXIC): +209.38 (+1.56%) to 13,612.78
Crude (CL=F): +$1.26 (+2.35%) to $54.81 a barrel
Gold (GC=F): -$27.50 (-1.48%) to $1,836.40 per ounce
10-year Treasury (TNX): +2.8 bps to yield 1.1050%
1:23 p.m. ET: GameStop frenzy represents just the latest of a string of ‘chaos-driven challenges to establishment institutions’: GeoQuant CEO
The surge and then swoon of GameStop and other heavily shorted stocks is only the latest signal of dissatisfaction with establishment institutions, GeoQuant CEO Mark Rosenberg said, extending a trend that has been seen elsewhere in society including in the political sphere.
“I think the general, kind of chaos-driven challenges to establishment institutions which we’ve seen throughout our political economy – whether it’s in the political arena or now in the markets – is here to stay,” Rosenberg told Yahoo Finance on Tuesday. “How that plays out specifically I think no one can tell, but the idea that how things were, and the expectations [that] established players in these markets will be shaken up by bottom-up internet-driven groups, I think is probably here to stay.”
“The same forces that are driving our whacky and seemingly unpredictable politics of late …
are of a kind with this kind of activity in the market, which is effectively that large segments of the population are losing faith in our traditional institutions,” he added.
“They believe certain institutions, whether it’s the political system or the market system, are rigged, and they are increasingly using internet-based tools to take power to try to fight that impression.”
“The same forces that are driving our… seemingly unpredictable politics of late… are of a kind with this kind of activity in the market,” @geoquant's @myrosenbrg says on Reddit-fueled trading. “Large segments of the population are losing faith in our traditional institutions.” pic..com/YIRYnaDce0
— Yahoo Finance (@YahooFinance) February 2, 2021
12:00 p.m. ET: Stocks extend gains, Dow adds 600 points, or 2%
The three major indexes neared session highs around noon on Tuesday, led by a rally in banks and energy stocks. The financial, energy and consumer discretionary sectors led a more than 1.7% gain in the S&P 500. The Dow gained more than 600 points, or 2%, as Disney, Caterpillar and American Express outperformed
Each of the Big Tech “FAANG” names – , Amazon, Apple, Netflix and Alphabet – advanced strongly ahead of more earnings after market close, and the tech-heavy Nasdaq rallied.
9:30 a.m. ET: Stocks open higher, heading toward back-to-back sessions of gains
Here were the main moves in markets shortly after the opening bell:
S&P 500 (GSPC): +59.62 (+1.61%) to 3,773.86
Dow (DJI): +229.29 (+0.76%) to 30,211.91
Nasdaq (IXIC): +143.27 (+1.07%) to 13,546.66
Crude (CL=F): +$1.45 (+2.71%) to $55.00 a barrel
Gold (GC=F): -$25.40 (-1.36%) to $1,838.5 per ounce
10-year Treasury (TNX): +3.3 bps to yield 1.11%
8:12 a.m. ET: U.S. crude oil prices briefly touch $55 per barrel for the first time in a year
U.S. West Texas intermediate crude oil prices (CL=F) rose more than 2% Tuesday morning to hit $55 per barrel for the first time in one year, after the coronavirus pandemic decimated demand for travel and fuel in 2020.
Oil prices have rebounded strongly since November, when Pfizer and BioNTech first announced upbeat efficacy data for their COVID-19 vaccine. U.S. crude oil prices are now up about 6% over the past 12 months, and have rallied nearly 13% so far in 2021.
7:14 a.m. ET Tuesday: Stock futures extend gains ahead of the opening bell
Here’s were markets were trading Tuesday morning:
S&P 500 futures (ES=F): 3,794.75, up 29 points or 0.77%
Dow futures (YM=F): 30,339.00, up 229 points or 0.76%
Nasdaq futures (NQ=F): 13,335.75, up 99.25 points or 0.75%
Crude (CL=F): +$1.39 (+2.6%) to $54.94 a barrel
Gold (GC=F): +$16.40 (+0.88%) to $1,847.50 per ounce
10-year Treasury (TNX): +3.3 bps to yield 1.11%
6:11 p.m. ET Monday: Stock futures point higher
Here’s where markets were trading on Monday evening as overnight trading kicked off:
S&P 500 futures (ES=F): 3,768.25, up 2.5 points or 0.07%
Dow futures (YM=F): 30,131.00, up 21 points or 0.07%
Nasdaq futures (NQ=F): 13,257.75, up 21.25 points or 0.16%
NEW YORK, NEW YORK – MARCH 20: Traders, some in medical masks, work on the floor of the New York Stock Exchange (NYSE) on March 20, 2020 in New York City. Trading on the floor will temporarily become fully electronic starting on Monday to protect employees from spreading the coronavirus. The Dow fell over 500 points on Friday as investors continue to show concerns over COVID-19. (Photo by Spencer Platt/Getty Images)
Emily McCormick is a reporter for Yahoo Finance. Follow her on : @emily_mcck
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