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* J&J falls after COVID-19 vaccine trial data
* GameStop increases as brokers ease restrictions
* Honeywell decreases after gains (updates at market close)
NEW YORK, Jan. 29 (Reuters) – US stock indexes fell and closed Friday’s session with the biggest weekly drop since October as investors measured the ramifications of COVID vaccine test results -19 from Johnson & Johnson, while a clash between Wall Street hedge funds and small retail investors added to the volatility.
Johnson & Johnson fell as one of the biggest weights on both the Dow and S & P500 after the drug maker said its single-dose vaccine was 72% effective in preventing COVID-19 in the United States. with a lower rate of 66% observed worldwide.
The results are compared with the high bar established by two authorized vaccines from Pfizer Inc / BioNTech SE and Moderna Inc, which were about 95% effective in preventing symptomatic disease in key trials when administered in two doses. Shares of Moderna rose while shares of Pfizer changed little.
Concerns over a small squeeze that began earlier in the week resurfaced after an army of retail investors re-traded shares in stocks like GameStop Corp and Koss Corp, which fired after brokers like Robinhood eased some of the restrictions. which they had imposed on the negotiation.
“The big picture is that if there is any bad news that suggests or indicates that there could be a longer hibernation period to be indoors and not consume or spend, that tends to restore the market and a lot of people will feel on the sidelines, especially with this news, ”said Sylvia Jablonski, investment director of Defiance ETF in New York.
“And then with what happens (Gamestop) and all that, people are a little scared to trade.”
The increase in volatility has led to a huge increase in volume, which has added more than 20 billion shares in each of the last two sessions through US exchanges during the most active trading days recorded until 2014. , according to data from Refinitiv.
The U.S. Securities and Exchange Commission said it was closely monitoring any possible harm, both to brokers and social media traders.
Unofficially, the Dow Jones Industrial Average fell 629.89 points, or 2.06%, to 29,973.47, the S&P 500 lost 74.61 points, or 1.97%, to 3,712.77 and the Nasdaq Composite fell 273.58 points, or 2.05%, to 13,063.58.
The three main indices suffered the biggest weekly drop since late October.
Market participants have speculated that the volatility caused by the short pressures has caused investors ’favorites, including Apple Inc, to come under pressure as hedge funds come to cover billions of dollars in losses.
Shares of Apple declined, while Microsoft also fell.
Still, while concerns about rising COVID-19 cases and the deployment of crash vaccines kept investors suspicious of a decline and increased short-term volatility, the start of quarterly earnings has eased. some concern for widespread valuations.
Of the 184 S&P 500 companies that made gains as of Friday morning, 84.2% had exceeded analysts’ expectations, well above the 75.5% beat rate in the last four quarters, according to data from Refinitive.
Honeywell International fell after a 13% drop in quarterly earnings.
The first known U.S. case of the South African variant COVID-19, which was found to be partially resistant to current vaccines and antibody treatments, was detected Thursday in South Carolina.
The data showed U.S. labor costs rose more than expected in the fourth quarter, amid a wage jump, supporting views that inflation could accelerate this year, while another report showed that U.S. consumer spending fell for a second straight month in December.
Reports by Chuck Mikolajczak; edition by Diane Craft