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Greenwich, Connecticut, is home to many US hedge funds.
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Global stocks were hurt on Thursday, reacting to the forced sale by hedge funds after the unprecedented push by retail investors to buy heavily sold bonds. The main US stock indices were mixed, but happily quiet after a difficult Wednesday.
Right after opening, the
Dow Jones Industrial Average
rose 263 points, or 0.9%, while the
S&P 500
gained 0.8%, and the
Nasdaq Composite
0.7% added.
In Asia, which had a hot start in 2021, the
Nikkei 225
ended 1.5% lower and the
Hang Seng
fell 2.6%.
The
Stoxx Europe 600
recovered from previous losses and fell 0.2%.
The
S&P 500
on Wednesday it ended 2.6% lower, the worst performance since October.
The financial turmoil was caused by the organized purchase of companies, including video game retailer
GameStop
(ticker: GME), software company
Blackberry
(BB) and cinema network
AMC Entertainment
(AMC), all with problematic financial performance that led many institutional participants to sell their shares.
“The retail purchase has forced several large hedge funds to repurchase the shares as soon as possible to limit the damage. [GameStop] it was the most traded stock in the United States for the second consecutive day in the middle of the earnings season, ”said Marshall Gittler, head of investment research at BDSwiss.
GME resources
(GME.AU), the Australian mining company that shares nothing in common with GameStop other than its GME symbol, rose 13% in Sydney.
Mark Haefele, director of investment for global wealth management at UBS, said the outlook remains bright, noting the 68% jump to the S&P 500 from March 2020 lows.
“After an increase of this magnitude, and with stocks close to record highs, it is understandable that short-term uncertainty is leading to increased volatility. In our opinion, however, attention is likely to focus on gains, stimuli and vaccine release. We believe that the medium-term trajectory for the market remains higher ”, he said.
The frenzy led by GameStop is overshadowing an important day for profits and economic news.
Gross domestic product increased by 4% in the fourth quarter, losing estimates of 4.3%, while claims for unemployment benefits improved to 847,000 from 900,000 last week and exceeding expectations to 875,000.
Apple
(AAPL) shares fell 2.2% after the company said it earned $ 1.68 per share, against estimates of $ 1.41. The company posted revenue of $ 111 billion, exceeding expectations of $ 103 billion.
Tesla
(TSLA) shares fell 5.3% after the electric vehicle maker recorded a mixed quarter. The company earned 80 cents per share, losing estimates of $ 1.03, while recording revenue of $ 10.74 billion, against a forecast of $ 10.4 billion.
Facebook
(FB) shares rose 4.9% after the company exceeded revenue and earnings expectations, recording a profit of $ 3.88 per share against estimates of $ 3.22 on revenue of $ 28 billion, exceeding the expectations of $ 26.4 billion.
McDonalds
(MCD) rose 0.5% even after the company did not meet expectations. The fast-food chain said it earned $ 1.70 a share, below the estimated value of $ 1.78, with revenue of $ 5.31 billion, below expectations of $ 5.37 billion.
Twitter
(TWTR) rose 2.7% on a weak day for technology, as KeyBanc upgraded the sector’s weight stock to Overweight.
Write to Steve Goldstein at [email protected] and Jacob Sonenshine at [email protected]