Traders on the floor of the New York Stock Exchange.
Source: New York Stock Exchange
US futures declined in overnight trading on Thursday as the volatile week on Wall Street 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 earnings from Disney, Intel and American Express. The S&P 500 rose nearly 1%. Thursday’s rally follows Wednesday’s weakest Dow and S&P sales in three months. The Nasdaq Composite closed 0.50% on Thursday.
Thursday’s rally was a reversal of the recent weakness fueled by market volatility fueled by speculative retail investor trading. Several e-brokers have taken steps to reduce the deliberate purchase of very short-circuited names, giving investors a breath of remarkable, albeit seemingly synthetic, moves in names like GameStop.
However, shares of brick game retailer and AMC Entertainment appeared in extended trading on Thursday, after Robinhood said it would allow limited buying of restricted securities on Friday.
Investors are concerned that if GameStop continues to grow, it could cause higher losses on hedge funds, which in turn could cause waves in the market as these funds are forced to sell other securities in order to raise cash. At the same time, there is concern that GameStop mania is a sign of a bigger bubble in the market and that its release could cause turmoil and could severely affect retail investors.
“From a regulatory perspective, we’ve seen a phenomenon that allows its investors to call it retail investors by gathering in new trading mechanisms,” Hercules Investments’ James McDonald told CNBC’s “Fast Money.” “I saw this during Dotcom and it led to the establishment of practices that were restricted to everyday trading rules. There will be limits to the extent to which I can make instructions or recommendations, these rules will be applied and then the brokers will follow. “
Strong corporate gains continued to come after the bell on Thursday. Payment giant Visa, Mondelez, Western Digital and Skyworks Solutions grew in extended trading after reporting better profits and sales than expected for their quarterly results.
Caterpillar, Chevron, Eli Lilly and Honeywell report earnings before the bell on Friday.
Regarding the vaccine, the biotech company Novavax said on Thursday that its coronavirus vaccine was 89% more effective in protecting against Covid-19 in its third phase clinical study in the United Kingdom.
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