Traders on the floor of the New York Stock Exchange.
Source: New York Stock Exchange
Futures of U.S. stocks fell Thursday night trading as the volatile Wall Street week continued.
Dow futures fell about 40 points. The S&P 500 futures fell 0.2% and the Nasdaq 100 futures lost 0.15%.
On Thursday, the Dow Jones Industrial Average rose 300 points, thanks to gains from Disney, Intel and American Express. The S&P 500 was up about 1%. Thursday’s rally follows Dow and S&P’s worst-selling commodity in three months on Wednesday. The Nasdaq Composite closed 0.50% on Thursday.
Thursday’s rally was a reversal of recent stock weakness driven by market volatility spurred by retail investors ’speculative trading. Several e-brokers took steps to curb the intentional purchase of very short names, which gave investors a respite from the notable, albeit seemingly synthetic, moves in names like GameStop.
However, shares of Brick Gaming retailer and AMC Entertainment were appearing in the expanded trade on Thursday after Robinhood said it would allow the limited purchase of some of the restricted titles on Friday.
Investors are concerned that if GameStop continues to rise, it could lead to higher losses in hedge funds, which in turn could cause waves in the market, as those funds are forced to sell other securities to raise cash. At the same time, he worries that GameStop mania is a sign of a bigger bubble in the market and that its unraveling could also cause turmoil and severely affect retail investors.
“From a regulatory perspective, we’ve seen a phenomenon of allowing us to call them retail investors grouping into new trading mechanisms,” James McDonald of Hercules Investments told CNBC’s “Fast Money”. “We saw this during the execution of Dotcom and it led to the institution of practices that were restricted to daily business rules. There will be limits to the extent that I can make instructions or recommendations, these rules will apply and intermediaries will continue . “
Strong corporate gains continued to plummet after the bell on Thursday. Paying giants Visa, Mondelez, Western Digital and Skyworks Solutions rose in expanded trade after reporting better-than-expected earnings and sales from their quarterly results.
Caterpillar, Chevron, Eli Lilly and Honeywell reported earnings before the bell on Friday.
As for the vaccine, biotech company Novavax said on Thursday that its coronavirus vaccine was more than 89% effective in protecting against Covid-19 in its phase three clinical trial conducted in the UK.
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