US stocks have plunged again, as a speculative frenzy on the GameStop and a handful of other actions raises concerns about how much damage an online revolt against Wall Street bigwigs can have on the wider market.
The Dow Jones industrial average closed the session down 620.74 points, or 2%, to 29,982.62, while the S&P 500 fell 1.9%, giving the benchmark the highest weekly loss in October.
Meanwhile, GameStop grew almost 70% on Friday, continuing a saga that captivated and confused many on Wall Street and beyond.
The company is recovering much of its steep losses from the previous day, after the Robinhood trading platform said it would allow customers to start buying some of its shares again.
The Dow Jones industrial average closed the session with 620.74 points on Friday
Meanwhile, GameStop grew nearly 70 percent on Friday, continuing a saga that captivated and confused many on Wall Street and beyond.
GameStop has been in a staggering 1,600 percent race over the past three weeks and has become the battleground where swarms of smaller investors are seen making an epic 1 percent position.
The so-called “Reddit rally” has seen thousands of individual investors camped on social media forums, such as Reddit’s Wallstreetbets, which has nearly 6 million members, to raise stock prices for GameStop and other former companies. in difficulty.
The attack is aimed directly at hedge funds and other Wall Street titans who have bet that the stock of video game retailers will fall.
These companies have heavy losses, and other investors say that pushes them to sell other shares they own to raise cash. This, in turn, helps to demolish parts of the market that are completely unrelated to the ongoing riot by smaller investors and start-ups.
The manic moves for GameStop and a few other previously beaten actions have drowned out many of the other issues weighing on the markets, including the virus, the launch of vaccines and potential aid to the economy.
Most visitors on Wall Street and the market say they expect investors with smaller pockets pushing GameStop to eventually burn out.
The struggling retailer is expected to lose more money in the next fiscal year and many analysts say its stock should be closer to $ 15 than $ 330.
Meanwhile, calls for regulators to step in are growing on Capitol Hill, and the Securities and Exchange Commission says it is closely monitoring the situation.
“You’ve seen a lot of volatility this week, so when you have some unknowns like what you see in the retail world, people are a little worried about record highs here and taking some money off the table,” said Megan Horneman. portfolio strategy director at Verdence Capital Advisors.
GameStop stock returned to racing on Friday, and the global US market fell again as the captivated and confused saga of Wall Street increases the drama
The S&P 500 fell 73.14 points to 3,714.24. It ended the week with a loss of 3.2%, the worst week in three months. It ended January with a 1.1% loss, its first monthly decline since October. The S&P 500 has been up 13.6% since the end of October.
The technology-intensive Nasdaq composite fell 266.46 points to 13,070.69. The Russell 2000 index of smaller companies dropped 32.97 points, or 1.6%, to 2,073.64.
Some of the largest shares of the index were Apple, Microsoft and other Big Tech stocks, which have been big winners for professional investors and other investors in the last year.
Johnson & Johnson dropped as one of the heaviest weights for both the Dow and the S&P 500 after the doctor said its single-dose vaccine is 72% effective in preventing COVID-19 in the United States at a rate less than 66% observed globally. .
The results are compared with the high bar set by two vaccines authorized by Pfizer and Moderna, which were around 95% effective in preventing symptomatic disease in key studies when given in two doses. Moderna shares have risen, while Pfizer shares have changed little.
Analysts said the results, which would require only one shot instead of the two required by other vaccine manufacturers, were below expectations.