Traders on the floor of the New York Stock Exchange.
Source: New York Stock Exchange
US stock futures fell in the early morning trade on Thursday, with the volatile Wall Street week continuing.
Dow’s 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 at Disney, Intel and American Express. The S&P 500 was up almost 1%. Thursday’s high follows the worst sale on the Dow and S&P in three months on Wednesday. Nasdaq Composite closed up 0.50% on Thursday.
Thursday’s recovery was a reversal of the recent stock weakness fueled by market volatility spurred by speculative retail investor trades. Several e-brokers have taken steps to curb the deliberate purchase of heavily sold names, giving investors a break from the notable, though apparently synthetic, moves in names like GameStop.
However, the shares of brick-and-mortar game retailer and AMC Entertainment were bursting into trading on Thursday after Robinhood said he would allow limited purchase of some of the restricted titles on Friday.
Investors are concerned that if GameStop continues to rise, it could cause further losses in hedge funds, which in turn can cause market fluctuations, as these funds are forced to sell other securities to raise money. At the same time, there is concern that GameStop mania is a sign of a bigger bubble in the market and that its unfolding could also cause turbulence and hit retail investors hard.
“From a regulatory perspective, we saw a phenomenon of, say, retail investors crowding into new trading mechanisms,” said James McDonald of Hercules Investments in CNBC’s “Fast Money”. “We saw this during the Dotcom race and it resulted in the institution of practices that were restricted to day trade rules. There will be limits on the extent to which instructions or recommendations can be made, these rules will be applied and then brokers will follow. “
Strong corporate earnings continued to roll after Thursday’s bell. Payments giant Visa, Mondelez, Western Digital and Skyworks Solutions climbed into extended trades after reporting better-than-expected profits and sales in their quarterly results.
Caterpillar, Chevron, Eli Lilly and Honeywell report gains ahead of the bell on Friday.
Regarding the vaccine, the biotechnology 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 United Kingdom.
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